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China may be heading into an economic crisis. Is it time to short the Yuan against major Forex currencies? If it is time to short the Yuan, which currency should one trade against? If the Chinese economy tanks Australia will be hit as it exports a lot of raw material to China. Japan is a major trading partner of China. Will the Yen devalue further if the Yuan falls? Is Canada and the CAD safe? How about the US dollar if the Chinese currency falls due to a debt crisis and falling exports or, even worse, a political crisis? Forex Factors and How they Affect the Yuan Fundamental analysis of Forex pairs requires good fundamental analysis followed by up to the minute technical analysis. The value of a currency depends on politics, monetary policy, balance of trade, currency reserves and economic stability. Shorter term, technical analysis of market sentiment hinges on pronouncements and actions of central banks and technical trading factors. While technical analysis can give traders an advantage in short term trading, the fundamentals are what drive currency prices over the long term. How to trade Forex successfully is typically to use fundamental analysis of Forex pairs to gain a sense of the market possibility and technical analysis to spot short term opportunity. With these caveats in mind, what drives the Yuan today? Real Estate Bubble China is overbuilt. At lease on the high end there are way too many big projects that are sitting empty. At the same time many smaller projects that could benefit the community are not happening. Capital that went into mega construction projects is not making money and at some point foreign investment will back off. If the real estate bubble in China collapses it may well bring the value of the Yuan down with it. Debt Crisis Transparency has never been of China’s strong points. Hidden debt and unaccounted debt threaten to bring down the Chinese economic system. The situation is reminiscent of Japan twenty years ago when the Japanese economy was riding high and Japanese investors were buying Rockefeller Center and the Pebble Beach golf course. Handshake loans that had been hidden from public view helped bring down the Japanese economy which proceeded to flat line for the next two decades. A debt crisis would be a good reason to short the Yuan.
Citation preview
China may be heading into an economic crisis. Is it time to short the Yuan against major Forex currencies? If it is time
to short the Yuan, which currency should one trade
against?
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
If the Chinese economy tanks Australia will be hit as it
exports a lot of raw material to China. Japan is a major trading partner of China.
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
Will the Yen devalue further if the Yuan falls? Is Canada and the CAD safe? How about the
US dollar if the Chinese currency falls due to a debt crisis and falling exports or,
even worse, a political crisis?
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
Forex Factors and How they Affect the Yuan
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
Fundamental analysis of Forex pairs
requires good fundamental analysis followed by up to the
minute technical analysis. The value of a currency
depends on politics, monetary policy, balance of trade, currency reserves and
economic stability.By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
Shorter term, technical analysis of market sentiment hinges on pronouncements and actions of central banks
and technical trading factors.
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
While technical analysis can give traders an advantage in
short term trading, the fundamentals are what drive currency prices over the long
term.
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
How to trade Forex successfully is typically to use fundamental analysis of Forex
pairs to gain a sense of the market possibility and
technical analysis to spot short term opportunity. With these caveats in mind, what
drives the Yuan today?By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
Real Estate Bubble
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
China is overbuilt. At lease on the high end there are way
too many big projects that are sitting empty. At the same time many smaller projects
that could benefit the community are not
happening.
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
Capital that went into mega construction projects is not making money and at some
point foreign investment will back off. If the real estate
bubble in China collapses it may well bring the value of
the Yuan down with it.
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
Debt Crisis
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
Transparency has never been of China’s strong points.
Hidden debt and unaccounted debt threaten to bring down
the Chinese economic system.
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
The situation is reminiscent of Japan twenty years ago
when the Japanese economy was riding high and Japanese
investors were buying Rockefeller Center and the Pebble Beach golf course.
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
The situation is reminiscent of Japan twenty years ago
when the Japanese economy was riding high and Japanese
investors were buying Rockefeller Center and the Pebble Beach golf course.
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
Slowing Exports
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
The worst recession in three quarters of a century has taken its toll on China. Its
biggest customer is Europe and the EU is ridden with
recessions and flirting with loss of members on its
southern flank.
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
With exports down the rate of growth in China is has fallen from the ten percent per year
level over the last years to 7.5%. Economists are
projecting that the next stop will be 5% a year and even
lower.
By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
How to trade Forex successfully in this case is to be aware of the fundamentals that drive the Yuan versus the Euro,
USD, and other major currencies and trade
accordingly. If you are going to short the Yuan do your own
fundamental and technical analysis and do not rely on
tips.By: http://www.theforexnittygritty.com/forex/time-to-short-the-yuan
